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CARES Act Tax Holiday: Do You Know What’s in Your Fuel Price?

Navigating the Coronavirus Aid, Relief, and Economic Security Act’s impact on Federal Excise Tax—practical advice as a follow up to Avfuel’s April 6 CARES Act Tax Holiday FAQ email (access here).

“Call, click or swipe.”  At Avfuel, this is the marketing pneumonic used to explain how our customers can check contract fuel availability, associated pricing and make payments.  Call and speak with someone at Avfuel, available 24 hours a day, 7 days a week.  Click your way onto, log in and view availability and pricing.  Or, check your fuel price ahead of time and then swipe your card at the front counter for quick, automated purchases.  Easy enough!

As simple as shopping for fuel should be, there are always a host of items that deserve attention. However, specific to the CARES Act passed in late March, examining whether a fuel price contains Federal Excise Tax (FET) makes its way to the top of the list when attempting to compare fuel prices from one vendor or FBO, to another.

In its most basic and general guideline, if you fly “for reward” (think FAR Part 135), you are eligible for the FET holiday.

The implications of this legislation are significant when comparing fuel prices.  Specifically, most part 135 flights have historically been assessed an FET rate of $0.244/gallon.  There are exceptions of course, but this rate is what a majority of the charter world faces when purchasing jet fuel.  As jet fuel recently hit its lowest rate in decades, we saw “all-in” prices of jet fuel fall under $2/gallon in some parts of the country.  As such, FET started to make up 12% or more of an “out-the-door” fuel price per gallon.

The implications of FET are not limited to just those operators or flights that qualify for the FET holiday.  It may be even MORE important for those operators and flights that do NOT qualify (think FAR Part 91).  If your fuel vendor is advertising fuel prices without FET, what you are quoted and what you pay could end up dramatically different.

Here are a few recommendations to help clear up your fuel shopping experience:

  • Contact your fuel vendors to make sure you understand what is contained in your pricing.
  • If you are eligible for the FET holiday, and want to be price notified AND billed without FET, work with your fuel vendors to make sure you have the proper paperwork on file.
  • If you are eligible for the FET holiday, but you want to file for the refund on your own, or if you are NOT eligible for the FET holiday, make sure fuel providers are quoting and billing you inclusive of FET.

Once you understand how your fuel providers are pricing, quoting and billing you, your confidence in apples to apples fuel comparisons will go up—regardless if you call, click or swipe!

Learn More About the CARES Act FET Holiday »